After failing to secure sufficient financial backing, Britishvolt went into administration Tuesday. This meant that hopes of establishing the first electric vehicle (EV), battery gigafactory in Britain were severely shattered.
Northumberland-based company, which wanted to build a lithium-iron plant in northeast England, previously asked the government for support. The promise of PS100mln was made possible by the Automotive Transformation Fund, established by Boris Johnson, former prime minister.
Britishvolt’s appeals were ignored as a sign of the austerity measures that will be faced by the country over the coming years.
Britishvolt’s success is in stark contrast with Northvolt’s success, which may be poised for a larger share of the EV market after its competitor’s bankruptcy.
Northvolt began sending batteries from its northern Sweden production plant at the end 2021 to customers such as BMW, Volkswagen and Volvo Cars.
The company is currently developing its manufacturing capabilities to fulfill US$55bn of orders from its large client base.
Northvolt’s success is due to its ability raise the capital necessary for cutting-edge manufacturing.
The European Investment Bank provided a loan of US$350mln to Northvolt to help reduce the influence of Asian-based producers as part of a multibillion-euro subsidy program that covered seven member states.
Since the group’s inception in 2016, a mixture of equity and debt financing has raised a tidy US$8bn.
The most recent round of debt in July 2022 consisted of US$1.1bn worth convertible notes, which were issued by a syndicate consisting of AMF, Goldman Sachs (NYSE GS), ATP, and Baillie Gifford.
There is no doubt about it: EVs will be the majorstay of the automotive industry in the coming decades. This means that there won’t be any one start-up to fill the battery market.
The UK’s EV-battery sector should not be dismissed just yet. However, it will need some forward thinking by the authorities.